Correlation Between Gaztransport and Litigation Capital
Can any of the company-specific risk be diversified away by investing in both Gaztransport and Litigation Capital at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Gaztransport and Litigation Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gaztransport et Technigaz and Litigation Capital Management, you can compare the effects of market volatilities on Gaztransport and Litigation Capital and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Gaztransport with a short position of Litigation Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gaztransport and Litigation Capital.
Diversification Opportunities for Gaztransport and Litigation Capital
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gaztransport and Litigation is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Gaztransport et Technigaz and Litigation Capital Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Litigation Capital and Gaztransport is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Gaztransport et Technigaz are associated (or correlated) with Litigation Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Litigation Capital has no effect on the direction of Gaztransport i.e., Gaztransport and Litigation Capital go up and down completely randomly.
Pair Corralation between Gaztransport and Litigation Capital
Assuming the 90 days trading horizon Gaztransport is expected to generate 1.79 times less return on investment than Litigation Capital. But when comparing it to its historical volatility, Gaztransport et Technigaz is 1.91 times less risky than Litigation Capital. It trades about 0.17 of its potential returns per unit of risk. Litigation Capital Management is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 9,856 in Litigation Capital Management on August 30, 2024 and sell it today you would earn a total of 1,719 from holding Litigation Capital Management or generate 17.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gaztransport et Technigaz vs. Litigation Capital Management
Performance |
| Timeline |
| Gaztransport et Technigaz |
| Litigation Capital |
Gaztransport and Litigation Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gaztransport and Litigation Capital
The main advantage of trading using opposite Gaztransport and Litigation Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gaztransport position performs unexpectedly, Litigation Capital can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Litigation Capital will offset losses from the drop in Litigation Capital's long position.| Gaztransport vs. Lendinvest PLC | Gaztransport vs. Neometals | Gaztransport vs. Albion Technology General | Gaztransport vs. Jupiter Fund Management |
| Litigation Capital vs. Toyota Motor Corp | Litigation Capital vs. Neometals | Litigation Capital vs. Coor Service Management | Litigation Capital vs. Jupiter Fund Management |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
Other Complementary Tools
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios |